Auto Payment Agreement Template for Australia

It is a written arrangement under which a customer authorises a business or creditor to deduct scheduled payments automatically from their bank account or credit card. In Australia these are typically set up as direct debits through the banking system. The agreement records the amount, frequency, and duration of payments, as well as the customer's cancellation rights.

The ePayments Code, administered by ASIC, gives customers the right to dispute unauthorised or incorrect automatic payments and to receive a refund within 30 days where the error was not their fault. Customers can also cancel a direct debit by notifying either their bank or the business. Financial institutions that subscribe to the Code are bound to follow these dispute-resolution rules.

No. Varying the amount or frequency of an automatic payment without adequate notice is likely to breach Australian Consumer Law, which prohibits unfair contract terms in standard form agreements. The agreement must state how much notice the business will give before varying the payment terms. Typically, at least 14 days' written notice is considered reasonable and many businesses provide 30 days.

Customers can cancel by contacting the business directly or by instructing their bank to stop the direct debit. Under the ePayments Code, a bank must action a stop-payment request without delay. Cancelling with the business alone may not stop a payment already queued; for certainty, notify both the business and your bank, ideally at least three business days before the next payment is due.

Yes. Schedule 2 of the Competition and Consumer Act 2010 (Australian Consumer Law) prohibits unfair terms in standard form consumer contracts. A clause allowing the business to vary payments unilaterally without notice, or waiving the customer's right to dispute errors, is likely to be unfair and therefore void. ACCC and state consumer protection agencies can take action against businesses that rely on such terms.

Failed direct debits can trigger dishonour fees charged by the bank and, depending on the agreement, late-payment fees from the creditor. Under the National Consumer Credit Protection Act 2009, credit providers must not charge fees that are disproportionate to their actual costs. The agreement should clearly disclose any fees that may apply on a failed payment so customers are not taken by surprise.

Yes. A written (or electronic) record is required for auto payment agreements in Australia because the bank needs evidence of the account holder's consent to the direct debit authority. The Australian Payments Network's direct debit procedures require a signed authority (the DDR) before a business can debit a customer's account. Without written consent, the debit is unauthorised and the bank must reverse it.

The agreement must state the merchant's name and contact details, the account to be debited, the amount (or how it will be calculated), the payment frequency, the start date, the notice period for changes, and how the customer can cancel. Disclosures of any default fees and the dispute-resolution process under the ePayments Code should also be included. Omitting key terms can make the agreement unenforceable.